Identifier
Created
Classification
Origin
09TOKYO1730
2009-07-29 07:10:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tokyo
Cable title:  

APEC SENIOR OFFICIAL KURT TONG'S MEETINGS ON APEC AND

Tags:  EINV ECON PGOV PREL APECO JA 
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VZCZCXRO8981
RR RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHKO #1730/01 2100710
ZNR UUUUU ZZH
R 290710Z JUL 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 4977
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
UNCLAS SECTION 01 OF 02 TOKYO 001730 

SENSITIVE
SIPDIS

STATE PASS USTR, EAP/J

E.O. 12958: N/A
TAGS: EINV ECON PGOV PREL APECO JA
SUBJECT: APEC SENIOR OFFICIAL KURT TONG'S MEETINGS ON APEC AND
U.S.-JAPAN ECONOMIC RELATIONS

UNCLAS SECTION 01 OF 02 TOKYO 001730

SENSITIVE
SIPDIS

STATE PASS USTR, EAP/J

E.O. 12958: N/A
TAGS: EINV ECON PGOV PREL APECO JA
SUBJECT: APEC SENIOR OFFICIAL KURT TONG'S MEETINGS ON APEC AND
U.S.-JAPAN ECONOMIC RELATIONS


1. (SBU) SUMMARY: Acting U.S. Senior Official for APEC Kurt Tong
emphasized the need to focus on discrete outcomes rather than
process in U.S.-Japan economic relations, as well as in setting the
agenda for consecutive APEC host years, during meetings with senior
GOJ officials and U.S and Japanese business leaders on July 24.
Representatives from the American Chamber of Commerce in Japan
(ACCJ) and Japan's APEC Business Advisory Council (ABAC) both
expressed a desire to expand dialogue regarding Japan's role in the
regional economy. Japanese government interlocutors assessed the
GOJ's stance toward APEC engagement would not change significantly
under a Democratic Party of Japan (DPJ)-led government. END
SUMMARY.

BUSINESS PERSPECTIVES
--------------

2. (SBU) Over breakfast with the ACCJ Board of Directors, ACCJ Vice
President Larry Bates said the chamber is interested in expanding
its engagement with APEC, particularly through joint events with
Japan's APEC Business Advisory Council delegation. Bates noted the
two groups have worked jointly on financial issues in the past. The
ACCJ also has an ongoing dialogue with the Keidanren, which
functions as a secretariat for Japan's ABAC team, and the two
business groups released a joint statement July 21 on calling for
initiatives to overcome the economic downturn, including IPR
protection measures and customs harmonization. The ACCJ board
members also agreed that APEC would be a useful vehicle for engaging
Japan on issues that are important to the bilateral relationship and
Japan's role in the regional economy. Microsoft's Jim Foster
offered the ACCJ's upcoming White Paper on IT (due to be released in
September) as an example of an ongoing area of engagement that could
be expanded within APEC. Foster stressed Japan must take more steps
to harmonize its IT policies with global norms and avoid following a
"Galapagos" style growth model.


3. (SBU) The ACCJ board members shared their assessments of the
upcoming Lower House election and potential changes under a
Democratic Party of Japan (DPJ)-led government. Bates said the DPJ

appears to be maturing as it contemplates policies to encourage
economic reform, however its proposal to increase the number of
political appointments so as to limit bureaucratic influence over
policymaking may undermine the GOJ's ability to implement effective
policies. ACCJ Governor Mitsuyo Teramura questioned the
availability of experts from outside the party to consult the DPJ's
leadership as it attempts to translate its ideals into workable
policies. The ACCJ members are uncertain the DPJ can find another
Heizo Takenaka, for example. Regarding U.S. bilateral economic
relations with Japan, Tong urged the ACCJ to define concrete
measures that might improve U.S.-Japan trade and investment ties,
and which might win the support of the DPJ in the first year of its
possible governing leadership.


4. (SBU) Separately, Gempachiro Aihara, Chairman of Japan's APEC
Business Advisory Council delegation, said he looks forward to
working with his U.S. counterparts and with the Keidanren to develop
an agenda for the consecutive Japan-U.S. APEC years. Tong relayed
the ACCJ's interest in working with Japan ABAC members and suggested
the groups explore holding a joint event around the time of the next
ABAC meeting in Danang in late August.

METI PERSPECTIVES ON REGIONAL TRADE POLICY
--------------

5. (SBU) Ministry of Economy, Trade and Industry (METI) Economic
Partnership Division Director Noriyuki Mita, who chairs the APEC
investment experts group and directs METI's Free Trade Agreements
efforts, said showing some progress toward a Trans-Pacific
Partnership (TPP) is essential and asked about the future direction
of U.S. trade policy. Tong said he expects the administration to
more clearly define its trade policy later this year following the
push for health care reform. He added the fate of the KORUS FTA in
the Congress will be a major litmus test for U.S. trade policy.

U.S.-JAPAN INVESTMENT INITIATIVE:
NEED FOR CLEAR DELIVERABLES
--------------

6. (SBU) Tong stressed to METI Trade Policy Bureau Americas Division
Director Yasushi Akahoshi the need to develop clear deliverables
that the U.S.-Japan Investment Initiative could achieve in the next
year or two, if the Initiative is continued, noting that some
officials in Washington assess it has produced more talk than action
in recent years. Akahoshi agreed, saying the U.S.-Japan Investment
Initiative is useful as "good gaiatsu" for encouraging change within
Japan. Akahoshi offered the example of the Cabinet Office's program
to expand investment and proposed measures for reforming the mergers
and acquisition process as successful deliverables.


7. (SBU) Akahoshi said he expects little change in GOJ engagement
with APEC under a DPJ-led government, observing the party's
manifesto calls for developing strong ties with Asia (septel). In
this regard, Akahoshi suggested APEC may even gain stronger support

TOKYO 00001730 002 OF 002


at the political level under the DPJ if it is perceived as an
effective vehicle to deepen Japan's engagement with Asia.

MOFA ECONOMIC AFFAIRS DG SUZUKI ON
APEC, BILATERAL DIALOGUE
--------------

8. (SBU) MOFA Director General for Economic Affairs Yoichi Suzuki
said Japan needs to do more to promote regional integration and that
APEC serves as a vehicle for Japan to further open its economy.
Suzuki added that DPJ leader Yukio Hatoyama has stated he intends to
strengthen Japan's relationship with its Asian neighbors, and Suzuki
said APEC will likely be at the top of a DPJ administration's agenda
for advancing regional economic integration.


9. (SBU) Turning to the bilateral economic relationship, Suzuki said
the United States will naturally be at the top of the GOJ's agenda
following the August 30 election, as the new Prime Minister's first
overseas travel would likely be to the G-20 financial summit in
Pittsburgh. Suzuki added the U.S.-Japan economic dialogue is
important for MOFA in pushing issues to the GOJ leadership, such as
agriculture reform and climate change. Tong stressed the need for
substance, rather than process in the U.S.-Japan economic dialogue.
Noting the U.S. Strategic and Economic Dialogue with China, Suzuki
identified a need to manage perceptions to avoid the appearance that
Japan has fallen off the U.S. leadership's agenda. Tong said this
can best be accomplished through a dialogue that produces results,
just as with the S&ED.

MOFA DEPUTY FOREIGN MINISTER OTABE ON
U.S. ENAGAGEMENT IN ASIA
--------------

10. (SBU) Deputy Foreign Minister Yoichi Otabe said Japan welcomes
U.S. "reengagement" with the APEC process and a broader return to
Asia, noting Secretary Clinton's signing of the Treaty of Amity and
Commerce with ASEAN in Phuket July 22. Speaking of regional
economic development, Otabe said the U.S. and Japan should work
through organizations such as APEC and the OECD to encourage
"inclusive growth". Turning to APEC, Otabe noted the APEC Leaders'
Summit will occur shortly before the UN meetings on climate change
in Copenhagen and that climate change should also be on bilateral as
well as the APEC agendas. Otabe also inquired whether issues such
as food security, which could figure prominently in the APEC agenda,
and was highlighted in the L'Aquila G8 Leaders' Statement, should
not be coordinated bilaterally before being moved to a multilateral
stage. Tong stressed that the United States and Japan should
coordinate closely in their APEC efforts to ensure an effective
"one-two punch" on issues of concern when hosting the forum in 2010
and 2011.


11. (SBU) Turning to the need for a new bilateral economic dialogue,
Otabe said it is important that the United States and Japan discuss
bilateral issues and coordinate on multilateral issues.
Specifically he cited coordination on China as essential and
suggested discussions on policy steps Beijing should take to
strengthen the social safety net and discourage precautionary
savings so as to stimulate growth. Tong reviewed the points he made
to Suzuki on the need for any possible future U.S.-Japan economic
dialogue to make concrete progress on issues as well as to serve as
a coordination forum for multilateral issues. He added that the
perception in Washington has been the discussions have been far too
process-oriented, and have produced few tangible results. Otabe
agreed on the need for results and indicated he had told Deputy NSA
Mike Froman that Japan also wants a dialogue that produces results.


ZUMWALT